Leading
Change in a Legal Environment

Law
firm managers can be
keen observers of the
various stakeholders
and ensure that both
management and leadership
give people what they
need in order to deal
with significant change.

Change
is the only constant.
External changes driven
by globalization, the
economic ebbs and flows
and clients’ need
to manage their legal
spend have substantially
impacted law firms
and their leaders
and managers. External
changes have shone
a light on internal
issues such as unproductive
partners, poor practice
management, and unprofitable
practice areas. The
combination of external
and internal issues
has created a sense
of urgency. Behaviors
and issues that
might have been ignored
or left for a future
agenda are now under
the spotlight.

Administrators work on the business – the
firm is your client.

Partners
work in the business practicing law) and on the business (leading), and the inherent tension between the two may be the biggest hurdle to a change initiative.

If, as a professional manager, you had the opportunity to invest – significantly invest – in the law firm you
are currently managing, would you?

by Karen MacKay, MBA, CHIC
President

The Need

In December 2004, Sir
David Clementi tabled
his report reviewing
the regulatory framework
for the legal profession
in
England and Wales.
The result of the “Clementi
Report” gave
rise to the Legal
Services Bill, which
was presented to
the
British Parliament
in 2006 and given
Royal Assent in October
2007. One of the
consequences of the
changes in this
legislation is that
it opened the door
for non-lawyers to
invest in law firms.

Who
in their right minds
would invest in a
law firm? Well,
you might. As a significant
shareholder, you
might have
much greater influence
over how the firm
is run. As Richard
Susskind wrote in
his recent book, The
End of Lawyers, “the
delivery of legal
services will be a
very different business
when financed and
managed by non-lawyers.”

Anchored
by long traditions,
law is described as
a profession,
a craft, or a discipline
that is practiced
over years,
and the value of
the advice, advocacy,
and work product
increases with time,
experience, and wisdom.

Law
is a cottage industry
still today, with
many independent
lawyers and law
firms
held together by
selfgoverning bodies – bar
associations and law
societies – like
the
crafters guilds
of
old England. Like
the crafters guilds,
law
is an apprentice
model in which
young
lawyers learn from
more experienced
practitioners.

Law is an exclusive club with lawyers vs. “non-lawyers”
– akin to the ministry and “lay-people.” Lawyers have been
for hundreds of years the gatekeepers and interpreters of
information.

With free global access to information, tomorrow’s
legal services may look quite different. If clients’ needs
put an end to the “billable hour,” then tomorrow’s legal
services would look quite different. And when other
non-legal professionals start doing the work that was
historically done by lawyers, legal services as we recognize
them now will look quite different.

In a recent roundtable discussion (moderated in part
by
me) published in the July/August 2009 issue of Law Practice
magazine, five managing partners discussed the impact of
the economy and the environment of change in their law
firms. They cited the challenging economic environment
as creating opportunities to make some creative and
permanent changes in the roles of support staff, in creating
support teams, and in balancing workloads. One managing
partner indicated that the lawyer to assistant ratio is now
4.5 to 1. What new skills do legal assistants need to have in
order to effectively support four or five lawyers? What new
skills do lawyers need in order to work effectively in such a
team? What creative ideas can administrators bring to the
firm – ideas that might get acceptance, in part, because of
the prevailing economic environment?

Finally, the competitive landscape is shifting and
changing. Imagine a world in which lawyers customize
their workloads, their career development paths, and their
compensation structures. Imagine a world in which clients
pull together teams of advisers from around the world,
share work product, work seamlessly, and communicate
in real time and at no cost? Oh wait – that time is here now! Law firms that can
harness new technologies, engage
people, and successfully navigate the vortex of change will
position themselves to win in the new legal economy – the
new legal paradigm.

The Challenge

As noted previously, tension exists for some lawyers who
are both working in the business (practicing law) and
working on the business (leading and managing). As the
business professional, your client is the firm. You are
uniquely positioned to balance the perspectives of the
individuals, the groups, and the entity itself – the firm.
Resistance to change comes from many places.

How will
this affect me? How will this change the way I work? How
will this impact the bottom line and my share of it? How
will this affect my group? How will this affect the firm?

The need to change comes at various points in a firm’s
history. For smaller firms, the renewal of the firm’s lease
is often a pivot point for change. Partners have to choose
whether or not to continue to practice together for the next
five or 10 years.

This decision shines a light: Do I want to
practice with these people for 10 more years? What needs
to happen in order to make commitment? What will
happen to the individuals, to the groups, and to the firm
if we don’t?

Law firms are being pushed to reduce costs, to improve
quality, to grow revenue, and to keep people engaged.
Meanwhile, however, these same firms are inhabited by
smart people who can behave in ways that are counterproductive
to achieving great results. Smart people can
resist change in explicit and implicit ways. They can
be complacent; they can reinforce the status quo; they
lack patience with process; they can be comfortable with
precedent and uncomfortable with trial and error or the
organic nature of a change process.

The Process

John Kotter, a leadership and change guru from the
Harvard Business School, cites eight critical stages in the
process for creating major change in an organization.

Establishing a Sense of Urgency. Several factors can
create a sense of urgency. For example, as previously
noted, signing the firm’s lease represents a commitment
to the future. The advancing age of the firm’s
senior partners or the sudden death or illness of one
of the firm’s rainmakers can create a sense of urgency,
as could the sudden departures of the brightest young partners to start their own firm
and practice law in new and different ways. There are ways to
create a sense of urgency where none exists on the
surface. Review client retention information and
visit clients who haven’t used the firm in more than
a year. Talk to the most negative and disgruntled
partners to understand their perspectives. Conduct
client satisfaction interviews with outside consultants
or a team of realists within the firm. Honestly talk
about the firm’s problems and opportunities.

Creating the Guiding Coalition. In
order for members of a small group to create change, they must possess
enough mutual respect to work together as a team
and enough power and influence to actually lead
the change.

Developing a Vision and Strategy. A clear vision
creates a picture of the firm in the future. Strategies are
the clear and logical steps necessary to make the vision a
reality. According to Kotter, effective visions have six
characteristics: they are imaginable, desirable, feasible,
focused, flexible and communicable. If the vision you
create is missing one of these attributes, it creates an
opportunity for resistance. The vision must engage
the head and the heart by appealing to individuals
intellectually and emotionally.

Communicating the Change Vision. Communicating
the vision for the future requires the tireless work of the
leader or leaders in the firm. The message must be
simple, repetitive, and be disseminated in multiple
formats and forums. Leaders who can effectively
communicate a vision for the future engage people at all
levels and through several lenses and perspectives – “I”
(the individual), “We” (the group) and “It” (the firm).

Empowering
Broad-Based Action. Stewart McKelvey, a large law firm in Atlantic Canada, not
only puts its nine-step commitment to client service on
its Web site, but it also worked with focus groups at
all levels in the firm to give examples of how to deliver
on the firm’s service commitment. Example: The
firm’s first client service standard on the list is, “We
will work to provide you with the highest quality of
confidential, ethical legal services.” Other elements of
a solid commitment to client service include accuracy and attention to detail,
ownership of responsibilities,
and a focus on communication and teamwork.

Celebrating Short-Term Wins. People need
constant encouragement and reinforcement. When undergoing
significant change human nature can, and often does, focus
on the negative. LeClairRyan, which has approximately
300 lawyers in 20 offices across the United States, begins
every firm meeting with an “excellence message,” which
creates formal and constant opportunities to celebrate
short-term wins, to publicly acknowledge positive
behavior, and to generate momentum for change.

Consolidating Gains and Producing
More Change. In order for change to happen, you need to build
momentum. Small changes and short-term wins are
critical to building that momentum. Like the flywheel
described in Jim Collins’ best-seller Good to Great, once
the organization is really moving toward its new vision,
it can be difficult to stop (which is a good thing), and
you can take on new and bigger changes.

Anchoring New Approaches in the Culture.
Law firm culture is in large part driven by compensation – partner
compensation. In order to truly make new behaviors part of the culture,
they must be rewarded. More importantly, stop rewarding behaviors that you
are trying to change. This is no easy task, as partner
compensation is the most difficult thing to change – there is simply
so much at stake. Alternatively, you can anchor new approaches to communication.
When you want to align the firm behind a new strategy and connect
individual goals and objects to the new approach,
communicate constantly and in every manner possible.

Different Roles and Different Needs

The role of leadership is to produce change. Depending
on where a firm is in its life cycle, the degree of change
can range from tweaking behaviors to more dramatic
developments. Leaders – including legal administrators
– are charged with setting the direction and aligning
people, and then with motivating and inspiring them to
achieve results.

Law firm managers can be keen observers of the
various stakeholders and ensure that both management
and leadership give people what they need in order to
deal with significant change. Some of your people will be comfortable
with the vision and the rationale behind it,
while others will need facts and data to understand why
such change is necessary.

One size does not fit all in a change initiative,
so
be sensitive to the needs of all members of the firm and
be prepared to give them what they need in order for
them to understand it and, more importantly, to gain
their support.